The New Zealand company will pay approximately CAD42m (with adjustments) plus a 5% gross overriding royalty which is payable to Origin on future production from the TAWN fields.
As part of the agreement Origin will maintain an option for a period of ten years to use eight wells within the TAWN fields for gas storage.
In New Zealand, the production processing facilities at TAWN
underwent regularly scheduled maintenance in April 2006, and as a result, production levels were reduced for about fourteen days.
Plans are underway to determine the modifications necessary at the TAWN
processing facilities to process greater amounts of this gas so that it can meet specifications of the natural gas pipelines in the Taranaki region.
New Zealand reserves constitute 18% of the Company's total proved reserves with 13% of total reserves attributable to the Rimu/Kauri area and 5% to the TAWN
New Zealand reserves constitute 21% of the Company's total proved reserves with 15% of total reserves attributable to the Rimu/Kauri area and 6% to the TAWN
The Company also anticipates additional exploitation and exploration drilling activity in the TAWN
area, which would target the Tariki Sands and deeper pool tests.
Approximately 80% of the production for the third quarter was delivered from the TAWN
fields, however for the month of September, the Rimu/Kauri area accounted for approximately 28% of the production contrasted against 14% of the production for the month of July.
Northeast of the TAWN
area in New Zealand, SENZ has commenced the re-entry of the Tuihu-1A exploration well.
Production was down 7% from first quarter 2003 levels primarily as a result of scheduled plant maintenance at both the TAWN
and Rimu processing facilities.
The increased capital budget in New Zealand will enable the Company to continue with its successful development program in the Rimu/Kauri area as well as some further exploitation at TAWN